Connecticut House Bill HB05868

Connecticut 2023 Regular Session

• Introduced: 1/18/23
• Refer: 1/18/23

Caption

An Act Authorizing Municipalities To Impose A Tax On The Endowment Funds Of Private Institutions Of Higher Education.

Votes

As of the last recorded action, the voting history indicates a reserved public hearing with no votes cast for or against the bill. This suggests that the bill is still under consideration and has not yet proceeded to a formal vote in the legislature.

Impact

If enacted, HB 5868 would mark a significant shift in the financial landscape for private higher education institutions. Currently, private colleges benefit from certain tax exemptions, which have been defended by the argument that they contribute to the local economy through education and employment. By authorizing municipalities to tax endowment funds, the bill would potentially alter the financial benefits enjoyed by these institutions, leading to an increase in operational costs for them and possibly affecting their tuition structures or funding for programs.

Summary

House Bill 5868 proposes to grant municipalities the authority to impose a tax on the endowment funds of private institutions of higher education located within their boundaries. This bill aims to enable local governments to capture additional revenue from private colleges and universities, which often maintain substantial endowments yet may not contribute significantly to local tax bases. By allowing municipalities to tax these funds, the legislation seeks to address funding gaps that local governments face in providing services to their communities.

Contention

The proposed bill has attracted differing opinions from various stakeholders. Supporters argue that this measure will rightly impose a tax on wealthy private institutions, allowing local governments to benefit financially from their presence. They contend that taxing endowments can provide essential funds for community services and development. On the other hand, opponents argue that imposing such a tax could lead to negative consequences, including reduced financial aid for students and hindering the institutions' ability to support academic programs and faculty salaries. Critics suggest that this move could undermine the benefits that these institutions provide to the community by detracting from their resources.